Cryptocurrency crime witnessed a significant downturn in 2023, as reported by TRM Labs, with illicit crypto volume shrinking to $34.8 billion, a notable decline from the previous year’s $49.5 billion.
This reduction, amounting to nearly one-third, reflects a positive trend in combating illicit activities within the crypto space.
TRM Labs said that this decrease in illicit crypto funds outpaced the overall cryptocurrency transaction volume reduction of 22% during the same period.
Additionally, funds directed towards sanctioned addresses and entities experienced a considerable decline, dropping from $25.4 billion in 2022 to $16.2 billion in 2023, attributed partly to heightened scrutiny from governments and law enforcement agencies.
The intensified regulatory pressure was evident in the substantial increase in sanctions against crypto-related businesses and individuals, with a noteworthy rise in OFAC designations.
Notably, TRM Labs highlighted the involvement of twelve ransomware groups, six high-risk exchanges, and a cryptocurrency mixing service among the 33 OFAC designations.
Despite these advancements, darknet marketplaces maintained robust activity in the sale of illicit drugs, with volume surging to $1.6 billion in 2023 from $1.3 billion in 2022.
Corroborating TRM Labs’ findings, Chainalysis reported an increase in revenue for fraud shops and darknet marketplaces following the shutdown of the Hydra marketplace in 2022.
The combined revenue of darknet marketplaces surged to nearly $2 billion in 2023, signalling a 25% escalation from the previous year.
Chainalysis also revealed the emergence of two new darknet marketplaces aggressively promoting their services in Moscow, aiming to fill the gap left by Hydra’s demise.